8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 28, 2010

ORIENTAL FINANCIAL GROUP INC.

(Exact Name of Registrant as Specified in its Charter)

Commonwealth of Puerto Rico	001-12647	66-0538893
(State or other Jurisdiction of Incorporation)	(Commission File No.)	(I.R.S. Employer Identification No.)

Oriental Center
Professional Offices Park
997 San Roberto Street, 10th Floor
San Juan, Puerto Rico	00926
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (787) 771-6800

(Former Name or Former Address, if Changed Since Last Report)

     Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

     On January 28, 2010, Oriental Financial Group Inc. (the “Company”) announced the results for the quarter and year ended December 31, 2009. A copy of the Company’s press release is attached as an exhibit to this report.

Item 9.01. Financial Statements and Exhibits.

     (d) Exhibits

Exhibit No.		Description of Document
	99	Press release by the Company dated January 28, 2010.

2

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	ORIENTAL FINANCIAL GROUP INC.
Date: January 28, 2010	By:	/s/ Norberto González
		Norberto González
		Executive Vice President and Chief Financial Officer

EX-99

Exhibit 99.1

	Puerto Rico Contact: Marilyn Santiago-Colón, Oriental Financial Group Inc. (787) 993-4648
	U.S. Contact: Steven Anreder and Gary Fishman, Anreder & Company (212) 532-3232

ORIENTAL FINANCIAL GROUP REPORTS 2009 INCOME AVAILABLE TO COMMON
SHAREHOLDERS OF $18.1 MILLION, SIGNIFICANTLY IMPROVED LEVELS OF
ASSET QUALITY, LIQUIDITY, AND CAPITAL

Company Sells $536 Million of Non-Agency CMOs & CDOs,
Positioning the Group for Growth Opportunities

SAN JUAN, Puerto Rico, January 28, 2010 — Oriental Financial Group Inc. (NYSE: OFG) today announced income available to common shareholders for the year ended December 31, 2009 of $18.1 million, equal to $0.75 per basic and diluted share.

Results for the year included a 9.9% year over year increase in pre-tax operating income, to $62.1 million, and pre-tax net gains on sales of agency securities, derivatives and trading activities totaling $119.8 million. Results also include the effects in the fourth quarter of 2009 of sales of $116.0 million of collateralized debt obligations (CDOs) in December 2009 and $420.1 million of non-agency collateralized mortgage obligations (CMOs) in January 2010 (these transactions are described in more detail below). The CDOs and CMOs sold represented approximately 75% of Oriental’s non-agency investments.

Oriental’s pre-tax operating income, which is presented in the accompanying tables, consists of net interest income after provision for loan losses and core non-interest income from banking and financial service revenues, less non-interest expenses.

Comment

“We enter 2010 with one of the cleanest, most secure balance sheets among banks in Puerto Rico, with a strong and growing banking-financial services franchise and year-end book value of $10.82 per share, up 35.9% from $7.96 at December 31, 2008,” said José Rafael Fernández, President and Chief Executive Officer.

“The sale of the aforementioned CMOs and CDOs has significantly improved our asset quality and materially improved our liquidity, providing us with complete financial flexibility to pursue growth opportunities.”

“We are particularly pleased that our strong capital position enabled us to increase loan production and purchases in 2009 by 8.8%, to $323.3 million, helping families and businesses in Puerto Rico to buy homes and finance operations, thereby doing our part to contribute to the local economy,” Mr. Fernández said.

Annual Results Highlights

Operations

• Net interest income increased 17.6%, to $130.9 million, due to an improvement in the net interest margin to 2.14% from 1.86%, primarily reflecting lower cost of funds.

• Core banking and financial service revenues increased 12.6%, to $30.2 million, primarily reflecting a $6.0 million increase in mortgage banking activities, to $9.7 million.

• Retail deposits, benefiting from expanded market share, grew 29.8% or $323.0 million, to $1.4 billion, enabling the Group to reduce higher cost deposits.

• Higher cost brokered deposits decreased 60.8% or $315.2 million, and other wholesale institutional deposits decreased 25.8% or $47.6 million.

• Total client assets managed increased 6.4%, to $3.1 billion, with the opening of new trust, Keogh, 401K and wealth management accounts.

• Non-interest expenses increased 14.6%, to $83.4 million, largely the result of the industry-wide increase in Federal Deposit Insurance Corporation (FDIC) insurance assessments.

• As a result of increased operating income, investment gains, and income tax rates for financial institutions and international banking entities doing business in Puerto Rico, the income tax provision totaled $7.0 million.

Investment Portfolio

• The Group took advantage of market conditions during the year to realize gains on: (i) sales of agency securities of $78.3 million, (ii) derivative activities of $28.9 million, and (iii) trading activities of $12.6 million.

• Thereafter, in December 2009, the Group made the strategic decision to sell $116.0 million of CDOs at a loss of $73.9 million, including non-credit portion of impairment value previously recorded as unrealized loss in other comprehensive loss.

• For the same strategic reasons, in early January 2010, the Group sold $420.1 million of non-agency CMOs at a loss of $45.8 million. This loss was accounted for as other than temporary impairment in the fourth quarter of 2009.

• After giving effect to the aforementioned transactions, approximately 96% of the Group’s investment securities portfolio consists of fixed-rate mortgage-backed securities or notes, guaranteed or issued by FNMA, FHLMC or GNMA, and U.S. agency senior debt obligations, backed by a U.S. government sponsored entity or the full faith and credit of the U.S. government. This compares to 85% at September 30, 2009.

Capital

• Stockholders’ equity increased $68.8 million or 26.3%, to $330.2 million, at December 31, 2009, compared to a year ago, due to earnings retention and improved mark to market valuation of the Group’s investment portfolio.

• Tangible common equity to risk-weighted assets and total equity to risk-weighted assets at December 31, 2009 increased to 11.79% and 14.96%, respectively, from 8.40% and 11.47%, respectively at December 31, 2008.

• The Group maintains regulatory capital ratios well above the requirements for a well-capitalized institution. At December 31, 2009, the Leverage Capital Ratio was 6.52%, Tier-1 Risk-Based Capital Ratio was 18.79%, and Total Risk-Based Capital Ratio was 19.84%.

Credit Quality

• Net credit losses increased $1.9 million, to $6.7 million, representing 0.57% of average loans outstanding, versus 0.39% in 2008. The allowance for loan losses stood at $23.3 million (2.00% of total loans) at December 31, 2009, compared to $14.3 million (1.16% of total loans) a year ago.

• The Group’s non-performing loans generally reflect the economic environment in Puerto Rico. Nonetheless, the Group does not expect non-performing loans to result in significantly higher losses as most are well-collateralized with adequate loan-to-value ratios. In residential mortgage lending, more than 90% of the Group’s portfolio consists of fixed-rate, fully amortizing, fully documented loans that do not have the level of risk generally associated with subprime loans. In commercial lending, more than 90% of its loans are collateralized by real estate.

Highlights 4Q09 vs. 4Q08 Operating Results

• Oriental’s niche market approach to the integrated delivery of services to mid and high net worth clients continued to perform well as the Group expanded market share based on its service proposition and capital strength, as opposed to using interest rates to attract loans or deposits.

• Pre-tax operating income increased 1.4%, to $14.6 million compared to $14.4 million.

• Net interest income increased 7.1%, to $31.9 million, due to an improvement in the net interest margin to 2.11% from 1.98%, primarily reflecting lower cost of funds, partially offset by lower yields on assets due to the sale of certain higher yielding securities during 2009.

• Core banking and financial service revenues increased 28.4%, to $8.5 million, with across the board increases in financial services, banking services and mortgage banking activities. Financial services benefited from both a strong quarter in brokerage as well as in trust and insurance.

• Mortgage production and purchases increased 22.9%, to $68.2 million, and commercial loan production increased 55.3%, to $21.7 million. The Group sells most of its conforming mortgages, which represented 90% of fourth quarter production, into the secondary market, retaining servicing rights. As a result, mortgage banking activities reflect originations as well as a growing servicing portfolio, a source of recurring revenue.

• Non-interest expenses increased 14.3%, to $21.4 million, primarily due to increases in incentive-performance based compensation, FDIC insurance on Oriental’s larger deposit base, and professional fees.

Non-GAAP Financial Measures

From time to time, the Group uses certain non-GAAP measures of financial performance to supplement the financial statements presented in accordance with GAAP. The Group presents non-GAAP measures when its management believes that the additional information is useful and meaningful to investors. Non-GAAP measures do not have any standardized meaning and are therefore unlikely to be comparable to similar measures presented by other companies. The presentation of non-GAAP measures is not intended to be a substitute for, and should not be considered in isolation from, the financial measures reported in accordance with GAAP.

The Group’s management has reported and discussed the results of operations herein both on a GAAP basis and on a pre-tax operating income basis (as defined on page 1 of this release and calculated on the accompanying table). The Group’s management believes that, given the nature of the items excluded from the definition of pre-tax operating income, it is useful to state what the results of operations would have been without them so that investors can see the financial trends from the Group’s continuing business.

Tangible common equity consists of common equity less goodwill. Management believes that the ratios of tangible common equity to total assets and to risk-weighted assets assist investors in analyzing the Group’s capital position.

Conference Call

A conference call to discuss the Group’s results, outlook and related matters will be held on Friday, January 29, 2010 at 10:00 AM Eastern Time or 11:00 AM Puerto Rico Time. The call will be accessible live via a webcast on the Group’s Investor Relations website at www.orientalfg.com. A webcast replay will be available shortly thereafter. Access the webcast link in advance to download any necessary software.

About Oriental Financial Group

Oriental Financial Group Inc. is a diversified financial holding company operating under U.S. and Puerto Rico banking laws and regulations. Now in its 46^th year in business, Oriental provides a full range of mortgage, commercial and consumer banking services through 21 Oriental Group financial centers in Puerto Rico, as well as financial planning, trust, insurance, investment brokerage and investment banking services. Investor information about Oriental can be found at www.orientalfg.com.

Forward-Looking Statements

This news release may contain forward-looking statements that reflect management’s beliefs and expectations and are subject to risks and uncertainties inherent to the Group’s business, including, without limitation, the effect of economic and market conditions, the level and volatility of interest rates, and other risks and considerations detailed in the Group’s filings with the Securities and Exchange Commission. These or other factors could cause actual results to differ materially from forward-looking statements. The Group also disclaims any obligations to update information contained in this news release because of developments occurring after the date of issuance.

# # #

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	QUARTER ENDED												YEAR ENDED
Summary of Operations (Dollars in thousands, except per share data):	31-Dec-09			31-Dec-08			%			30-Sep-09				31-Dec-09			31-Dec-08			%
Interest Income:
Loans	$	17,798		$	19,684			-9.6	%	$	18,251			$	73,076		$	79,165			-7.7	%
Mortgage-backed securities		46,837			49,713			-5.8	%		48,750				198,015			184,019			7.6	%
Investment securities		10,209			17,491			-41.6	%		11,412				47,776			73,948			-35.4	%
Short term investments		23			148			-84.5	%		140				534			1,907			-72.0	%
Total interest income		74,867			87,036			-14.0	%		78,553				319,401			339,039			-5.8	%
Interest Expense:
Deposits		12,731			13,035			-2.3	%		13,990				54,693			49,781			9.9	%
Securities sold under agreements to repurchase		25,818			40,459			-36.2	%		27,209				116,755			161,363			-27.6	%
Advances from FHLB, term notes, and other borrowings		3,103			3,239			-4.2	%		3,106				12,380			14,280			-13.3	%
FDIC-guaranteed term notes		1,021			—			100.0	%		1,021				3,175			—			100.0	%
Subordinated capital notes		307			527			-41.7	%		333				1,465			2,304			-36.4	%
Total interest expense		42,980			57,260			-24.9	%		45,659				188,468			227,728			-17.2	%
Net interest income		31,887			29,776			7.1	%		32,894				130,933			111,311			17.6	%
Provision for loan losses		4,400			3,280			34.1	%		4,400				15,650			8,860			76.6	%
Net interest income after provision for loan losses		27,487			26,496			3.7	%		28,494				115,283			102,451			12.5	%
Non-Interest Income (Loss):
Financial service revenues		4,309			3,985			8.1	%		3,764				14,473			16,481			-12.2	%
Banking service revenues		1,640			1,398			17.3	%		1,422				6,020			5,726			5.1	%
Investment banking revenues (losses)		—			—			0.0	%		—				(4	)		950			-100.4	%
Mortgage banking activities		2,537			1,224			107.3	%		2,232				9,728			3,685			164.0	%
Total banking and financial service revenues		8,486			6,607			28.4	%		7,418				30,217			26,842			12.6	%
Net gain (loss) on:
Sales of securities		(52,003	)		25,162			-306.7	%		35,528				4,385			35,070			-87.5	%
Other than temporary impairments on securities		(47,399	)		—			-100.0	%		(8,259	)			(60,074	)		(58,804	)		-2.2	%
Derivatives		9,149			304			100.0	%		(64	)			28,927			(12,943	)		323.5	%
Mortgage tax credits		—			(2,480	)		100.0	%		—				—			(2,480	)		100.0	%
Early extinguishment of repurchase agreements		—			—			—			(17,551	)			(17,551	)		—			-100.0	%
Trading securities		137			19			100.0	%		(505	)			12,564			(13	)		100.0	%
Foreclosed real estate		6			(218	)		102.8	%		(278	)			(570	)		(670	)		15.0	%
Other investments		9			16			-43.8	%		10				43			148			-70.9	%
Other		10			1			100.0	%		21				71			608			-88.3	%
Total non-interest income (loss)		(81,605	)		29,411			-377.5	%		16,320				(1,988	)		(12,242	)		83.8	%
Non-Interest Expenses:
Compensation and employee benefits		8,345			7,291			14.5	%		7,882				31,971			30,572			4.6	%
Occupancy and equipment		3,768			3,630			3.8	%		3,747				14,763			13,843			6.6	%
Professional and service fees		2,968			2,599			14.2	%		2,459				10,428			9,203			13.3	%
Insurance		1,673			622			169.0	%		1,273				7,233			2,421			198.8	%
Advertising and business promotion		880			1,213			-27.5	%		1,097				4,208			3,970			6.0	%
Taxes, other than payroll and income taxes		875			652			34.2	%		834				3,004			2,514			19.5	%
Electronic banking charges		587			484			21.3	%		471				2,194			1,726			27.1	%
Loan servicing expenses		419			361			16.1	%		397				1,586			1,383			14.7	%
Communication		404			328			23.2	%		382				1,567			1,292			21.3	%
Directors and investor relations		344			305			12.8	%		348				1,374			1,159			18.6	%
Clearing and wrap fees expenses		317			349			-9.2	%		293				1,177			1,250			-5.8	%
Printing, postage, stationery and supplies		237			252			-6.0	%		194				902			988			-8.7	%
Other		589			649			-9.2	%		1,109				2,971			2,421			22.7	%
Total non-interest expenses		21,406			18,735			14.3	%		20,486				83,378			72,742			14.6	%
Income (loss) before income taxes		(75,524	)		37,172			-303.2	%		24,328				29,917			17,467			71.3	%
Income tax expense (benefit)		(1,479	)		(3,240	)		54.4	%		3,001				6,972			(9,323	)		174.8	%
Net income (loss)		(74,045	)		40,412			-283.2	%		21,327				22,945			26,790			-14.4	%
Less: Dividends on preferred stock		(1,201	)		(1,201	)		—			(1,201	)			(4,802	)		(4,802	)		—
Income available (loss) to common shareholders	$	(75,246	)	$	39,211			-291.9	%	$	20,126			$	18,143		$	21,988			-17.5	%
PRE-TAX OPERATING INCOME
Net interest income after provision for loan losses	$	27,487		$	26,496			3.7	%	$	28,494			$	115,283		$	102,451			12.5	%
Core non-interest income
Financial service revenues		4,309			3,985			8.1	%		3,764				14,473			16,481			-12.2	%
Banking service revenues		1,640			1,398			17.3	%		1,422				6,020			5,726			5.1	%
Investment banking revenues (losses)		—			—			—			—				(4	)		950			-100.4	%
Mortgage banking activities		2,537			1,224			107.3	%		2,232				9,728			3,685			164.0	%
Total core non-interest income		8,486			6,607			28.4	%		7,418				30,217			26,842			12.6	%
Less non interest expenses		(21,406	)		(18,735	)		-14.3	%		(20,486	)			(83,378	)		(72,742	)		-14.6	%
Total Pre-tax operating income	$	14,567		$	14,368			1.4	%	$	15,426			$	62,122		$	56,551			9.9	%

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	QUARTER ENDED												YEAR ENDED
(Dollars in thousands, except per share data):	31-Dec-09			31-Dec-08			%			30-Sep-09			31-Dec-09			31-Dec-08			%
INCOME (LOSS) PER COMMON SHARE
Basic	$	(3.10	)	$	1.61			-292.5	%	$	0.83		$	0.75		$	0.91			-17.6	%
Diluted	$	(3.09	)	$	1.61			-291.9	%	$	0.83		$	0.75		$	0.90			-16.7	%
COMMON STOCK DATA
Average common shares outstanding		24,303			24,295			—			24,303			24,289			24,260			0.1	%
Average potential common shares-options		51			16			220.1	%		65			17			67			-74.4	%
Total average shares outstanding and equivalents		24,354			24,311			0.2	%		24,368			24,306			24,327			-0.1	%
Cash dividends per share of common stock	$	0.04		$	0.14			-71.4	%	$	0.04		$	0.16		$	0.56			-71.4	%
Cash dividends declared on common shares	$	972		$	3,402			-71.4	%	$	972		$	3,888		$	13,608			-71.4	%
Pay-out ratio		-1.29	%		8.70	%		-114.8	%		4.82	%		21.33	%		61.54	%		-65.3	%
SELECTED FINANCIAL DATA
PERFORMANCE RATIOS:
Return on average assets		-4.49	%		2.56	%		-275.4	%		1.32	%		0.35	%		0.43	%		-18.6	%
Return on average common equity		-103.93	%		99.67	%		-204.3	%		28.12	%		7.16	%		9.51	%		-24.7	%
Efficiency ratio		53.02	%		51.49	%		3.0	%		50.82	%		51.74	%		52.65	%		-1.7	%
TAX EQUIVALENT SPREAD
Interest-earning assets		4.94	%		5.78	%		-14.5	%		5.19	%		5.22	%		5.68	%		-8.1	%
Tax equivalent adjustment		1.78	%		1.92	%		-7.3	%		1.79	%		1.72	%		1.88	%		-8.5	%
Interest-earning assets — tax equivalent		6.72	%		7.70	%		-12.7	%		6.98	%		6.94	%		7.56	%		-8.2	%
Interest-bearing liabilities		2.98	%		4.01	%		-25.7	%		3.12	%		3.22	%		4.06	%		-20.7	%
Tax equivalent interest rate spread		3.74	%		3.69	%		1.4	%		3.86	%		3.72	%		3.50	%		6.3	%
Tax equivalent interest rate margin		3.89	%		3.74	%		4.0	%		3.96	%		3.86	%		3.74	%		3.2	%
NORMAL SPREAD
Investments		4.65	%		5.62	%		-17.3	%		4.94	%		4.99	%		5.46	%		-8.6	%
Loans		6.15	%		6.39	%		-3.8	%		6.24	%		6.20	%		6.52	%		-4.9	%
Interest-earning assets		4.94	%		5.78	%		-14.5	%		5.19	%		5.22	%		5.68	%		-8.1	%
Deposits		2.90	%		3.35	%		-13.4	%		3.10	%		3.13	%		3.54	%		-11.6	%
Borrowings		3.01	%		4.25	%		-29.2	%		3.13	%		3.25	%		4.24	%		-23.3	%
Interest-bearing liabilities		2.98	%		4.01	%		-25.7	%		3.12	%		3.22	%		4.06	%		-20.7	%
Interest rate spread		1.96	%		1.77	%		10.7	%		2.07	%		2.00	%		1.62	%		23.5	%
Interest rate margin		2.11	%		1.98	%		6.6	%		2.17	%		2.14	%		1.86	%		15.1	%
AVERAGE BALANCES
Investments	$	4,907,790		$	4,791,032			2.4	%	$	4,886,104		$	4,938,214		$	4,759,824			3.7	%
Loans		1,158,245			1,231,864			-6.0	%		1,169,558			1,178,890			1,213,401			-2.8	%
Interest-earning assets	$	6,066,035		$	6,022,896			0.7	%	$	6,055,662		$	6,117,104		$	5,973,225			2.4	%
Deposits	$	1,755,052		$	1,554,648			12.9	%	$	1,803,455		$	1,746,042		$	1,405,929			24.2	%
Borrowings		4,022,421			4,159,521			-3.3	%		4,052,469			4,113,207			4,196,693			-2.0	%
Interest-bearing liabilities	$	5,777,473		$	5,714,169			1.1	%	$	5,855,924		$	5,859,249		$	5,602,622			4.6	%

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	AS OF
(Dollars in thousands)	31-Dec-09			31-Dec-08			%			30-Sep-09
BALANCE SHEET
Cash and due from banks	$	277,123		$	66,372			317.5	%	$	170,443
Investments:
Trading securities		523			256			104.3	%		39
Investment securities available-for-sale, at fair value with amortized cost of $5,044,017 (December 31, 2008 - $4,052,574, September 30, 2009 - $4,604,048)
FNMA and FHLMC certificates		2,764,173			1,546,750			78.7	%		2,601,515
Obligations of US Government sponsored agencies		1,007,091			941,916			6.9	%		695,912
Non-agency collateralized mortgage obligations		446,037			529,664			-15.8	%		457,216
CMO’s issued by US Government sponsored agencies		286,509			351,026			-18.4	%		302,502
GNMA certificates		346,103			335,781			3.1	%		229,760
Structured credit investments		38,383			136,181			-71.8	%		141,259
Puerto Rico Government and agency obligations		65,364			82,889			-21.1	%		64,462
Total investment securities available-for-sale		4,953,659			3,924,207			26.2	%		4,492,626
Federal Home Loan Bank (FHLB) stock, at cost		19,937			21,013			-5.1	%		19,937
Other investments		150			150			—			150
Total investments		4,974,269			3,945,626			26.1	%		4,512,752
Securities sold but not yet delivered		—			834,976			-100.0	%		417,280
Loans:
Mortgage loans		918,935			1,000,076			-8.1	%		932,696
Commercial loans (including commercial loans with real estate collateral)		197,777			187,077			5.7	%		194,718
Consumer loans		22,864			23,054			-0.8	%		21,446
Loans receivable, gross		1,139,576			1,210,207			-5.8	%		1,148,860
Less: Deferred loan fees, net		(3,496	)		(3,364	)		-3.9	%		(3,305	)
Loans receivable		1,136,080			1,206,843			-5.9	%		1,145,555
Allowance for loan losses		(23,272	)		(14,293	)		-62.8	%		(20,176	)
Loans receivable, net		1,112,808			1,192,550			-6.7	%		1,125,379
Mortgage loans held for sale		27,261			26,562			2.6	%		26,213
Total loans, net		1,140,069			1,219,112			-6.5	%		1,151,592
Accrued interest receivable		33,656			43,914			-23.4	%		39,970
Deferred tax asset, net		31,685			28,463			11.3	%		26,590
Prepaid FDIC Insurance		22,568			—			100.0	%		—
Premises and equipment, net		19,775			21,184			-6.7	%		20,202
Foreclosed real estate		9,347			9,162			2.0	%		8,319
Prepaid expenses		4,269			3,433			24.4	%		6,720
Derivative asset		8,511			—			100.0	%		—
Servicing asset		7,120			2,819			152.6	%		6,135
Investment in equity indexed options		6,464			12,801			-49.5	%		5,983
Mortgage tax credits		3,819			5,047			-24.3	%		3,819
Debt issuance costs		3,531			875			303.5	%		3,839
Goodwill		2,006			2,006			—			2,006
Investment in statutory trust		1,086			1,086			—			1,086
Accounts receivable and other assets		5,535			8,660			-36.1	%		4,310
Total assets	$	6,550,833		$	6,205,536			5.6	%	$	6,381,046

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	AS OF
(Dollars in thousands	31-Dec-09			31-Dec-08			%			30-Sep-09
Deposits:
Non-interest bearing demand deposits	$	73,548		$	53,056			38.6	%	$	73,097
Interest-bearing savings and demand deposits		706,750			450,786			56.8	%		769,119
Individual retirement accounts		312,843			286,691			9.1	%		307,717
Retail certificates of deposit		312,410			292,046			7.0	%		253,644
Total Retail Deposits		1,405,551			1,082,579			29.8	%		1,403,577
Institutional deposits		136,683			184,283			-25.8	%		160,243
Brokered deposits		203,267			518,438			-60.8	%		354,085
Total deposits		1,745,501			1,785,300			-2.2	%		1,917,905
Borrowings:
Federal funds purchased and other short term borrowings		49,179			29,193			68.5	%		35,328
Securities sold under agreements to repurchase		3,557,308			3,761,121			-5.4	%		3,557,086
Advances from FHLB		281,753			308,442			-8.7	%		281,741
FDIC-guaranteed term notes		105,834			—			100.0	%		105,112
Subordinated capital notes		36,083			36,083			—			36,083
Total borrowings		4,030,157			4,134,839			-2.5	%		4,015,350
Total interest-bearing liabilities		5,775,658			5,920,139			-2.4	%		5,933,255
Securities purchased but not yet received		413,359			398			100.0	%		30,945
Accrued expenses and other liabilities		31,650			23,682			33.6	%		34,277
Total liabilities		6,220,667			5,944,219			4.7	%		5,998,477
Preferred Equity		68,000			68,000			—			68,000
Common Equity:
Common stock		25,739			25,739			—			25,739
Additional paid-in capital		213,445			212,625			0.4	%		213,264
Legal surplus		45,279			43,016			5.3	%		52,659
Retained earnings		77,584			51,233			51.4	%		146,421
Treasury stock, at cost		(17,142	)		(17,109	)		-0.2	%		(17,147	)
Accumulated other comprehensive loss		(82,739	)		(122,187	)		32.3	%		(106,367	)
Total common equity		262,166			193,317			35.6	%		314,569
Total Stockholders’ equity		330,166			261,317			26.3	%		382,569
Total liabilities and stockholders’ equity	$	6,550,833		$	6,205,536			5.6	%	$	6,381,046
SELECTED FINANCIAL DATA AT PERIOD-END
Common shares outstanding at end of period		24,235			24,297			-0.3	%		24,232
Book value per common share	$	10.82		$	7.96			35.9	%	$	12.98
Trust Assets Managed		1,818,498			1,706,286			6.6	%	$	1,759,464
Broker-Dealer Assets Gathered		1,269,284			1,195,739			6.2	%		1,235,341
Total Assets Managed		3,087,783			2,902,025			6.4	%		2,994,805
Assets owned		6,550,833			6,205,536			5.6	%		6,381,046
Total financial assets managed and owned	$	9,638,616		$	9,107,561			5.8	%	$	9,375,851
Number of financial centers		21			23			-8.7	%		21

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	AS OF
(Dollars in thousands)	31-Dec-09			31-Dec-08			%			30-Sep-09
CAPITAL RATIOS
Leverage Capital Ratio		6.52	%		6.38	%		2.2	%		7.69	%
Leverage Capital Ratio Required		4.00	%		4.00	%					4.00	%
Actual Tier 1 Capital	$	414,702		$	389,235			6.5	%	$	496,541
Tier 1 Capital Required	$	254,323		$	244,101			4.2	%	$	258,445
Excess over regulatory requirement	$	160,379		$	145,134			10.5	%	$	238,096
Tier 1 Risk-Based Capital Ratio		18.79	%		17.11	%		9.9	%		15.81	%
Tier 1 Risk-Based Capital Ratio Required		4.00	%		4.00	%					4.00	%
Actual Tier 1 Risk-Based Capital	$	414,702		$	389,235			6.5	%	$	496,541
Tier 1 Risk-Based Capital Required	$	88,295		$	91,022			-3.0	%	$	125,657
Excess over regulatory requirement	$	326,407		$	298,213			9.5	%	$	370,884
Risk-Weighted Assets	$	2,207,383		$	2,275,550			-3.0	%	$	3,141,420
Total Risk-Based Capital Ratio		19.84	%		17.73	%		12.0	%		16.45	%
Total Risk-Based Capital Ratio Required		8.00	%		8.00	%					8.00	%
Actual Total Risk-Based Capital	$	437,975		$	403,523			8.5	%	$	516,717
Total Risk-Based Capital Required	$	176,591		$	182,044			-3.0	%	$	251,314
Excess over regulatory requirement	$	261,384		$	221,479			18.1	%	$	265,403
Risk-Weighted Assets	$	2,207,383		$	2,275,550			-3.0	%	$	3,141,420
Tangible common equity to total assets		3.97	%		3.08	%		28.9	%		4.90	%
Tangible common equity to risk-weighted assets		11.79	%		8.40	%		8.8	%		9.95	%
Total equity to total assets		5.04	%		4.21	%		19.7	%		6.00	%
Total equity to risk-weighted assets		14.96	%		11.47	%		1.2	%		12.18	%

ORIENTAL FINANCIAL GROUP
Financial Summary
(NYSE: OFG)

	QUARTER ENDED												YEAR ENDED
(Dollars in thousands)	31-Dec-09			31-Dec-08			%			30-Sep-09			31-Dec-09			31-Dec-08			%
Loan Production and Purchases Summary:
Mortgage loans production	$	63,214		$	53,658			17.8	%	$	54,507		$	243,727		$	229,895			6.0	%
Mortgage loans purchased		5,013			1,858			169.8	%		1,717			12,558			7,031			78.6	%
Total mortgage		68,227			55,516			22.9	%		56,224			256,285			236,926			8.2	%
Commercial		21,746			14,000			55.3	%		10,518			57,850			55,802			3.7	%
Consumer		3,392			814			316.7	%		2,426			9,198			4,415			108.3	%
Total loan production and purchases	$	93,365		$	70,330			32.8	%	$	69,168		$	323,333		$	297,143			8.8	%
CREDIT DATA
Net credit losses:
Mortgage	$	717		$	850			-15.6	%	$	544		$	3,423		$	1,977			73.1	%
Commercial		408			225			81.3	%		70			2,167			407			434.2	%
Consumer		179			379			-52.8	%		328			1,080			2,344			-54.2	%
Total net credit losses	$	1,304		$	1,454			-10.3	%	$	942		$	6,670		$	4,728			41.1	%
Net credit losses to average loans outstanding		0.45	%		0.47	%		-4.3	%		0.32	%		0.57	%		0.39	%		46.2	%

	AS OF
	31-Dec-09			31-Dec-08			%			30-Sep-09
Allowance for loan losses	$	23,272		$	14,293			62.8	%	$	20,176
Allowance coverage ratios:
Allowance for loan losses to total loans		2.00	%		1.16	%		72.4	%		1.72	%
Allowance for loan losses to non-performing loans		22.30	%		18.45	%		20.9	%		21.67	%
Allowance for loan losses to non-residential non-performing loans		144.25	%		239.90	%		-39.9	%		211.40	%
Non-performing assets summary:
Mortgage	$	88,238		$	71,531			23.4	%	$	83,551
Commercial, mainly real estate		15,688			5,186			202.5	%		8,792
Consumer		445			772			-42.4	%		751
Non-performing loans		104,371			77,489			34.7	%		93,094
Foreclosed properties		9,347			9,162			2.0	%		8,319
Non-performing assets	$	113,718		$	86,651			31.2	%	$	101,413
Non-performing loans to total loans		8.97	%		6.28	%		42.8	%		7.94	%
Non-performing loans to total assets		1.59	%		1.25	%		27.2	%		1.46	%
Non-performing assets to total assets		1.74	%		1.40	%		24.3	%		1.59	%
Non-performing assets to total capital		34.44	%		33.16	%		3.9	%		26.51	%